CTV-Chum deal gets hearing Monday

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TORONTO -- Whether or not Canadian TV networks will be able to compete with the U.S. giants on digital platforms could well hinge on hearings set to begin Monday on CTVglobemedia's proposed takeover of rival Chum Ltd.

The Canadian Radio-television and Telecommunications Commission hearings in Ottawa, which will consider regulatory approval for the CAN$1.4 billion ($1.23 billion) deal, will determine the fate of 65 radio and TV stations. It is the first in a series that the regulator plans to hold this year to weigh and rule on recent industry consolidation.

Also this summer, the CRTC will consider whether rival CanWest Global Communications and equity partner Goldman Sachs and Company should be allowed to purchase Alliance Atlantis Communications for CAN$2.3 billion ($1.99 billion). That hearing will likely turn on the thorny issue of foreign involvement from a Wall Street powerhouse.

The CRTC also will consider Astral Media's purchase of privately owned Standard Broadcasting for CAN$1.2 billion ($1.06 billion), and cable giant Rogers Communications' CAN$137.5 million ($121 million) acquisition of terrestrial and cable channels from CTVglobemedia.

CTVglobemedia executives have yet to show their hand, but they are expected to tell the regulator that the Canadian TV industry needs fewer and larger players to fend off gathering foreign competition on emerging digital platforms.

The regulator already has indicated it will consider the Chum takeover by CTVglobemedia on competition grounds, specifically whether the deal will produce undue media concentration.

"The current wave of consolidation in the Canadian broadcasting industry, and the possibility of more major transactions in the future, raises important questions relating to the diversity of voices in Canada," the new CRTC chairman Konrad von Finckenstein said in March.

Peter Murdoch, vp of media for the Communications, Energy and Paperworkers Union of Canada, which represents TV technicians and journalists, on Friday said he will appear at the hearings next week to oppose the Chum acquisition on the grounds that CTVglobemedia will use the stations as a "dumping ground" for U.S. shows it chooses not to run on its existing CTV network.

"The approval of a deal like this is will give other private broadcasters the feeling they can avoid commitments to Canadians and their culture," Murdoch said, fearing a growing reliance for Chum on American shows will reduce its offerings of homegrown TV shows.

Despite that protest, the CRTC is expected to approve the current slew of industry takeover deals it will consider this summer and fall, with certain strings attached.

All the takeover deals sprang from a desire by the target broadcaster's controlling shareholder to cash out their majority voting shares.
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